On the go: 2020 was the first year to see unchanged levels of participation since the auto-enrolment scheme was introduced, according to new figures from the Office for National Statistics published on Monday.
The figures show that almost a quarter of employees were without a workplace pension in 2020, a higher proportion than for just employees who are ineligible for AE.
The latest statistics suggest that 88 per cent of eligible employees were participating in a workplace pension in 2019.
The fact that there were eligible employees not participating in a workplace pension could be explained by individuals choosing to leave the scheme by opting out, although non-compliance to AE from employers may also be a factor, the ONS stated
The proportion of employees with a workplace pension grew substantially from 2013 until 2020 when the participation rate levelled off. In 2020, nearly eight out of 10 employees were in workplace pension schemes, compared with less than five out of 10 in 2012.
Furthermore, in 2020 the gender gap in workplace pension participation was negligible; however, full-time employees were 1.5 times more likely to have a pension than part-time employees.
The youngest employees outside the AE eligibility age of 16 to 21 years were far less likely to have a workplace pension, at 20 per cent; participation was 80 per cent for the next age band aged 22 to 29 years.
The ONS stated that the increase in pension membership over this time clearly shows the success of the AE policy in increasing participation in workplace pensions.
Ian Browne, pensions expert at Quilter, said: “These figures do illustrate that there remains a persistent gap in workplace pension participation between the public and private sectors.
“While it has improved enormously since 2012, public sector employees were still significantly more likely (90 per cent) to have a workplace pension than those in the private sector (73 per cent).”
He continued: “This year marks the first time since the introduction of automatic enrolment that overall participation has not improved.
“This may be due to more people feeling like that they need more money in their pocket today, or it could simply be that participation has hit a ceiling and unless other policy levers are pulled this figure is unlikely to budge.
“As the economic realities of the pandemic become clearer, it will be interesting to see whether this figure remains flat or even drops if people’s finances are put under more strain.”
